This publication has been produced by Passenger Transport, in association with Transport Times Events, to co-incide with the fourth annual UK Bus Summit. This event will be held in London at the QEII Conference Centre, Westminster, on February 6, 2019, and is supported by the CPT, Department for Transport, Greener Journeys, LowCVP and Transport for London.

The UK Bus Summit Review 2019 puts the spotlight on local bus services in the UK, and the operators, authorities, suppliers and other stakeholders involved in planning and providing them. It celebrates the sector’s achievements and considers the challenges that it faces now and in the years ahead. The focus of this year’s UK Bus Summit will be the future of mobility, why we need a long term bus investment strategy, air quality and also how to get passengers onboard buses.

Contents include:

LEAD STORY

‘Bus use decline can be reversed’Ahead of next month’s UK Bus Summit in London, senior bus industry figures have argued that a sustained decline in bus use across Great Britain is not inevitable. But the industry needs a long-term investment strategy and help with congestion

NEWS

North America exit nets Stagecoach $271mMartin Griffiths says sale of group’s last remaining international business will allow it to focus on ‘significant opportunities for growth in the UK’

]]>‘Bus use decline can be reversed’http://www.passengertransport.co.uk/2019/01/bus-use-decline-can-be-reversed/
Fri, 11 Jan 2019 12:24:21 +0000http://www.passengertransport.co.uk/?p=12867Ahead of next month’s UK Bus Summit in London, senior bus industry figures have argued that a sustained decline in bus use across Great Britain is not inevitable. But the industry needs a long-term investment strategy and help with congestion

The decline in bus use across the United Kingdom can be halted if the right interventions are made. That is the message from the UK bus industry to central and local government ahead of next month’s UK Bus Summit in London.

This view is expressed by a number of senior industry figures in the UK Bus Summit Review 2019, which accompanies this edition of Passenger Transport.

“We need a long-term bus investment strategy if we are to reverse this decline and maximise the role the bus can play in supporting jobs, growth and productivity,” writes Claire Haigh, chief executive of pro-bus campaign group Greener Journeys.

Haigh wants this strategy to include:

Revenue support for bus services;

Increased funding for local transport;

Increased investment in local bus infrastructure;

Modal switch from car to sustainable transport;

Demand management measures to reduce traffic.

Giles Fearnley, managing director of First UK Bus, saw “definite reasons for optimism” in 2018, but argues that congestion continues to be the biggest threat to the bus industry. “It is vital that we continue to address this head-on,” he writes.

In many ways, 2018 was an extremely challenging year for the transport sector. But buckle up, because 2019 will be a bumpy ride

In 2018, we saw the great train timetable fiasco, which Chris Grayling attempted to blame on everyone else

A new year is a time for optimism, to put behind us all those mistakes and embarrassments of the previous year. Or so they say.

Anyway, the good people at Passenger Transport have asked me to look back at the last year and forward to the next.

In 2018, we saw the great train timetable fiasco, which Chris Grayling attempted to blame on everyone else until he was rumbled by the evidence. Stephen Glaister, who was commissioned to carry out a review of the fiasco, correctly identified shortcomings in Network Rail, Govia, and yes, the Department for Transport.

The transport secretary also decided to keep the existing formula used to determine fare increases, leading to an average increase of 3.1% this month to the fury of almost everyone. This formula uses the discredited RPI instead of CPI, which had it been used would have resulted in significantly lower increases. But with an amazing display of chutzpah, he then blamed the fare increases on the unions and that their wage rates should be linked to, wait for it, CPI not RPI.

It is also worth noting that the fares controlled by the industry itself, the minority, actually rose slightly less than those controlled by the Department for Transport.

We also saw Crossrail, near to its opening date, suddenly delayed by another year or so, and the resignation of its chair, Terry Morgan, who also gave up his chairmanship of HS2, a role he had only recently been appointed to by, er, Chris Grayling. HS2, as I set out in a previous column (PT194), is doing its best to get itself knocked on the head through the chaotic management of this prestigious project.

We saw passenger numbers on buses contract further, particularly in supported services as central government slowly strangle local councils. Oblivious to the damage being done to rural areas in particular, Chris Grayling suggested buses could soon be replaced by Uber-type services. The chancellor and former transport secretary Philip Hammond made the same vacuous suggestion in his budget, as he threw more money at the motorist and starved the bus passenger. Self-evidently, none of this will help meet the government’s climate change targets or tackle congestion.

And on climate change, Chris Grayling promised to “lead consumer uptake” of electric cars and seemed unfazed either by the revelation last month that less than 2% of his department’s own fleet was electric, or by the Treasury’s action in cutting by £1,000 the plug-in grant for members of the public who want to buy such vehicles, and ending the subsidy altogether for hybrids.

He studiously did nothing to address calls to improve airport security by dealing with the threat posed by drones. Indeed, he blocked plans to regulate drones saying they were an infringement of the free market, or personal liberty, or some other such guff. He then seemed taken aback by the serious incident at Gatwick over Christmas.

He would breezily state that no blame for any of this should be laid at his door, of course. Why, he is only the transport secretary. He does not control the rail network, he pleads. (Except that the DfT largely does). He is not at fault over Crossrail – that’s the London mayor, or Terry Morgan or someone else. He does not run airports or manufacture electric cars. He is not responsible for buses. Bus policy? Not me, mate.

So as 2019 begins, we are very sorry to announce that Chris Grayling has not been cancelled – unlike thousands of train services last year

So as 2019 begins, we are very sorry to announce that Chris Grayling has not been cancelled – unlike thousands of train services last year. The number of cancelled or significantly late trains in 2018 was the highest for 17 years.

In his defence, it might be argued that the transport secretary has been hugely distracted by Brexit and the enormous challenges from that. So how has that been going?

Well, Chris is on the case. As just a two minute delay at Dover for each vehicle is likely to cause a tailback of over 15 miles, he has designated the M26 as a giant lorry park. Meanwhile, an internal civil service assessment suggested that Dover, which handles 17% of our exports and imports, could collapse on day one of our brave new world.

As for Eurostar services, the ability of coach operators to move freely in and out of the EU, and the mutual acceptance of driving licence, well we have ages to go yet to March 29, don’t we?

But he has not been idle. In a startlingly original – even surrealist move – Grayling decided to award a contract for contingency ferry services after Brexit day to Seaborne Freight, a company that has no ferries, indeed no ships, has never moved a lorry and has never operated a ferry service.

A quick glance at their website does not provide any comfort. The terms and conditions listed there appear to relate not to shipping, but to takeaway pizzas, advising customers to check goods before “agreeing to pay for any meal/order”.

Now I am all in favour of supporting small British companies, which was Grayling’s repeated and robotic justification when challenged on this award by reporters. I can think of a really good little restaurant in my town of Lewes that is equally well qualified. It has no ships either, has never run ferries, and moreover, their catering is such that there is frankly no need to check goods before agreeing to pay for your meal.

Overall, the government has allocated £107m to these contingency ferry arrangements, money, by the way, which will be largely non-refundable if the ferries are not needed. Just think what £107m could do to revitalise our bus network. It is, of course, just one of many huge bills being run up by the government as Brexit day approaches. Perhaps the £350m figure on the side of the famous Brexit bus referred to the extra costs to the taxpayer rather than any savings that might ensue.

Seaborne Freight will, under DfT plans, take £13.8m of the £107m being doled out. The rest will go to French and Danish ferry companies. It is called “taking back control”.

Brexit is now less than three months away, with a no-deal, however disastrous, still a possible outcome. One minister quoted in one of the newspapers, trying bravely to talk up no-deal in a sort of 1940’s Britain-can-take-it spirit, breezily observed that we could cope with the worst so long as the transport system worked well and then paused before adding: “Oh expletive deleted, that’s Grayling.”

So one safe prediction for 2019 is that, as in 2018, Brexit will be all-consuming, and will put every other issue in the shade. This is true whatever happens – the chaos of a no-deal; the adoption of the prime minister’s agreement with the EU, which in practice only opens the door to years of negotiations about trade; or a decision to withdraw the Article 50 Notice (which the European Court has ruled we are entitled to do unilaterally) and hold another referendum.

What will happen? Well it seems almost certain that the prime minister will lose the long delayed vote on her deal next week. Beyond that, nobody knows. But there are some interesting factors at play.

First, recent opinion polling shows a strong majority (58-42) to stay in the EU, and a clear majority over either no-deal or what the prime minister has negotiated.

Second, a big majority of Conservative voters and party members would rather leave with no deal than with Theresa May’s negotiated deal, despite her best efforts to scare people into backing it.

Third, around 90% of Labour party members want to remain in the EU, and polling suggests Labour would collapse to its worst election result since the 1920s if it facilitates Brexit. Jeremy Corbyn is of course in favour of Brexit, suffering as he does under the tragic delusion that if only we can escape the shackles of the capitalist EU, he can create a socialist paradise here in Britain.

Here are some scenarios. Take your pick.

1. Theresa May ramps up the apocalyptic vision, and holds a repeat of the first vote, but closer to March 29 to try to bounce MPs into accepting it for fear of no deal.

2. Parliament finds a way to prevent the government from crashing out without a deal. There is clearly a majority in the House for this, but it is not clear how this can be accomplished. The statutory position that parliament has created for itself is that leaving with no deal is indeed the default. The role of the Speaker may be crucial here, and he is generally accepted to be both pro-Remain and anti the Tory front bench.

3. Parliament finds a way to revoke the triggering of Article 50 (see above).

4. The prime minister resigns. Unlikely, but not impossible.

5. We crash out without a deal.

What will not happen is a renegotiation with the EU. Their patience with Britain is at an end, and in any case there is no time left.

Away from Brexit, the good news is that the difficult birth of the new train timetable should finally be seen to have delivered a healthy child, and the much delayed arrival of new rolling stock should ramp up. Similarly, Network Rail may be well behind with its improvement programme, and a good deal of it, at least in terms of electrification, has been cancelled, but much is still being delivered and will help. Crossrail will open and be popular from day one.

The RMT conductors’ dispute shows no sign of ending soon, and Chris Grayling’s root and branch review of the railways is likely to take a good deal of time to emerge from the long grass, and there is no guarantee anything much will change when it does.

I predict a better year for train passengers in 2019 than in 2018. Well it could hardly be much worse

But overall, I predict a better year for train passengers in 2019 than in 2018. Well it could hardly be much worse.

For bus passengers, the upheaval at the industry’s umbrella body, the Confederation of Passenger Transport, caused some jolting and jarring, but there are signs that the end result may be beneficial, particularly if the industry is able to find a way to articulate its voice more effectively.

And Chris Grayling? Well we can only hope he ‘leaves on the line’ from Horseferry Road, but somehow I doubt he will.

Happy New Year…

About the author:

Norman Baker served as transport minister from May 2010 until October 2013. He was Lib Dem MP for Lewes between 1997 and 2015.

Train manufacturer Alstom and rolling stock leasing company Eversholt have announced that they expect the UK’s first hydrogen-powered trains to be operating in 2021. It follows the completion of an engineering study and design concept for the conversion of Eversholt’s Class 321 electric fleet into ‘Breeze’ hydrogen multiple units (HMUs).

The trains operated by Greater Anglia are due to start coming off lease this year as the company replaces its fleet. The conversion, to be carried out at Alstom’s Widnes factory, will see hydrogen tanks installed inside the train to fit the UK loading gauge, rather than on the roof as with Alstom’s iLint trains introduced in Germany last September. The units will also be reduced in size from four cars to three as part of the conversion, but Eversholt said they would still have more seats than the regional and rural trains they are intended to replace.

The Breeze HMUs will have a top speed of 140km/h and a range of 1,000km. Alstom and Eversholt view the main benefits over diesel units as superior passenger comfort on virtually silent trains as well as the absence of harmful emissions. The top speed is comparable to diesel units and acceleration is expected to be faster. The companies are now working with train operators and Network Rail to develop business cases and evaluate detailed introduction plans for the trains and the associated fuelling infrastructure.

Nick Crossfield, Alstom UK & Ireland managing director, said the trains offered a solution for meeting the government’s aim of eliminating diesel rolling stock on routes which are unlikely to be electrified. The government has set a target to remove all diesel trains by 2040.

]]>UK Bus Awards 2018 Souvenir Brochurehttp://www.passengertransport.co.uk/2018/12/uk-bus-awards-2018-souvenir-brochure/
Fri, 07 Dec 2018 16:20:23 +0000http://www.passengertransport.co.uk/?p=12840November saw the 23rd annual UK Bus Awards held at a ceremony in London, and you can read all about the winners and finalists in this official Souvenir Brochure.

Click on the image below to view The Big Book of Big Winners 2018.

]]>Stagecoach considers US coach business salehttp://www.passengertransport.co.uk/2018/12/stagecoach-considers-us-coach-business-sale/
Fri, 07 Dec 2018 16:05:57 +0000http://www.passengertransport.co.uk/?p=12834Increasing competition sees Stagecoach write down the value of North American assets and consider whether to exit the US market or adapt

There’s a new kid in town: Flixbus began operating in the US in May

Stagecoach has started discussions with a potential buyer of its North American coach business. The option of a total or partial sale is being considered as part of a strategic review prompted by increasing competition.

In its half-year results released on December 5, Stagecoach reported that operating profit in North America had fallen from £21.2m to £16.1m during the six months to October 27, 2018, on revenue down from £256.3m to £245.7m. It also announced it had written off £85.4m from the value of its US assets after forecasting that future profits would be lower than previously anticipated.

Recognising the increasingly competitive market environment, and the associated financial impact, we consider it appropriate to revise our view on the long term profitability

“Recognising the increasingly competitive market environment, and the associated financial impact, we consider it appropriate to revise our view on the long term profitability,” Stagecoach said.

Stagecoach’s review of its position in the US follows warnings from FirstGroup that its Greyhound national coach business is experiencing similar trading issues. Industry sources have predicted that UK companies will face increasing difficulty competing against airlines and coaching rivals with deeper pockets. They include Flixbus, which acquired Stagecoach’s European Megabus business in 2016 and began operating in the US in May.

In the UK, Stagecoach reported that profits fell in all divisions apart from regional bus where network revisions, fare rises and rail replacement work contributed to strong financial performance. Rail profits were hit by the loss of the SWT franchise while strong competition for tenders hit London bus profits. Across the group, operating profit fell 10% to £103.4m. After exceptional items, principally the write down of US assets, Stagecoach reported an operating loss of £6.2m.

The responses to this year’s annual rail fares increase were all too predictable. The industry should consider some different tactics

Rail passengers have faced years of above inflation fare increases

Another January, another in the relentless sequence of fare rises on our trains. And another set of all too predictable responses.

So first the facts: fares will increase by an average of 3.1% from January 2, an increase roughly twice that of average earnings. Some people may now be paying a fifth of their salary to get to work and back.

Fares have risen by 37% over the last 10 years, significantly ahead of wage inflation. Meanwhile over the last nine years, fuel duty for motorists has been frozen and petrol prices have actually come down, reflecting the price of a barrel of oil on the world market.

Then the responses, as familiar as a wet summer’s day in Manchester. First up is the government, in the shape of re-heated transport minister Andrew Jones, who points out rail fare increases have been held at the level of inflation for the last six years.

Yes Andrew, but that is still six years of increases compared to six years of no increases in fuel duty for motorists. That is a political choice. You also glide over the fact that the increases are linked to RPI, the Retail Price Index, an index which Mark Carney, the governor of the Bank of England, described earlier this year as having “no merit”. Mr Carney seems to be making a habit of relaying inconvenient truths. Good on him.

If the alternative index, the Consumer Price Index (CPI) had been used, fares would have risen by much less

If the alternative index, the Consumer Price Index (CPI) had been used, fares would have risen by much less. Last July for example, the annual RPI rise was 3.6% and the CPI equivalent just 2.6%.

Not that the Department for Transport is against CPI, of course. Back in August, transport secretary Chris Grayling was urging the unions to switch from RPI to CPI to determine future wage increases, calling the present pay arrangements “inflation-busting” (whereas RPI fare increases are presumably merely in line with inflation).

His Conservative colleague Huw Merriman recently put it this way:

“If the unions are really serious about limiting fare rises, they should accept the same method for setting pay which their passengers are limited to, rather than threatening more strike action.”

And what of the unions? Well their enthusiasm for RPI increases does not seem to extend from wages to fare levels.

The RMT, in a cliché so tired it must have been borrowed from Rip Van Winkle, describes the looming fare increases as “another kick in the teeth for Britain’s passengers.”

For literary variation, the TSSA general secretary, Manuel Cortes, calls it the “annual kick-in-the-teeth time”.

Just how many teeth are left?

“The only solution to Britain’s fare rip-off,” says the RMT general secretary Mick Cash, “is a publicly-owned railway run solely in the public interest free from the greed of the private train companies.”

But hang on, around half the fares like season tickets and off-peak returns are determined by the publicly-owned government, and that half has actually gone up marginally more than those controlled by the private train companies. He might also ask why walk-on fares on the privately-run Hull Trains and Grand Central are significantly cheaper than the state-run operation running on the same tracks.

As for the “greed”, the rate of return for these private companies is around 2 to 3%, a much slimmer margin than almost anywhere else in the private sector.

Meanwhile Jeremy Corbyn, the man who chooses to sit on the floor of a train while seats are available, at least when photographers are present, calls the forthcoming fares increase “an insult” and pledges to “take back control” of the railways. We have heard a good deal about “taking back control” recently, and none of it very well grounded.

The Labour leader seems not to understand that Network Rail is already in public ownership and that the state controls not just half the fares, but much of the timetable, all the safety standards, and takes all the important rolling stock decisions. Is he ignorant of all this or deliberately making an argument he knows to be dodgy? And by the way, is his answer to take away responsibility from the train companies and hand it to a Tory government and a Tory secretary of state that he regularly slams as useless and not acting in the interests of passengers?

So what do all these responses have in common? They are selective with the truth and designed to advance a political aim without letting inconvenient facts get in the way.

The public, who have had to put up with above CPI-inflation rises for years now, and who have had to endure a particularly torrid 2018, with the big timetable meltdown, punctuality at its lowest level since 2006, and it seems, never-ending strike action by the RMT, are unsurprisingly and justifiably incandescent with the latest increases.

Also unsurprising, given the selective spin they are fed, is a general failure to understand the complex nature of the railways. A quick glance at the Daily Mail feedback section of their website is instructive.

One Christine Swan writes: “They are all private companies and do exactly what they want and aren’t governed by performance targets.” No they can’t, and yes they are.

Another, Kieran Taylor, writes: “The rail services are still not improving, so where is our money going?”

Yet the government is engaged in the biggest investment programme since the 19th century. I know – I helped start it. Network Rail will be tackling 330 projects over this Christmas period alone.

Under the circumstances, you would have expected the rail industry to have initiated a robust and effective campaign to spell out the facts to passengers. After all, the Rail Delivery Group, which brings together the train companies, the freight operators and Network Rail, and which is supposed to be the PR voice for the industry, has been in existence since 2011.

Now the creation of the RDG was a sensible step and it has been more useful at getting across generic messages than came out of the vacuum that preceded it.

But the RDG has created a glass ceiling for itself which muffles the message. It will not ever criticise the government, which it perceives to be biting the hand that feeds it. Honesty, the RDG seems to believe, may have unwelcome consequences.

This is most noticeable with Southern, who are subject to a management contract let by the DfT, and who have to operate on the tightest of leashes, but who have to take the blame for anything that goes wrong, whether it is their fault or not. Readers will recall how Chris Grayling was fast out of the traps to blame Southern management (and Network Rail) for the timetable chaos earlier this year, a criticism met with a mute response from Southern. Yet as facts tumbled out, the culpability and shortcomings of Mr Grayling and his department in this matter became all too clear.

In terms of the fare rises, we do not hear from the industry that half the fares are set by government, that the choice of RPI rests with politicians, and that the government has a policy of shifting the balance of cost from the taxpayer to the train passenger. Nor does rhw industry point out that the operation of the railways is largely controlled by the state, so the idea that “renationalisation” will make life a whole lot better for the passenger is not one that stands up to close scrutiny.

So what do we hear from the industry? Well there are the usual sympathetic noises and standard apologies, and the argument that the fare increases are to help pay for the investment programme, which may be the truth but is not, as explained above, the whole truth.

Robert Nisbet, speaking from London Bridge for the RDG, this year blamed the rising cost of fuel. Sorry? There must have been some pretty bad forward buying on future fuel deliveries.

The RDG needs to start telling it as it is, and stop meekly accepting the role of whipping boy for the government of the day. If it does not set out the facts, nobody else will.

The RDG needs to start telling it as it is, and stop meekly accepting the role of whipping boy for the government of the day. If it does not set out the facts, nobody else will.

It needs to be less defensive about the fare structure generally. Yes, anytime returns are very expensive and compare unfavourably with other European countries. But in other regards, prices compare well. The i newspaper recently considered four comparable routes in England, Germany, France and Italy. The price of an off-peak advance ticket here was half the price of the French and Italian equivalents, and 40% cheaper than the German. The RDG needs to make this sort of comparison better known, and also explain the basics better – why peak travel is more expensive than off-peak travel.

Back in the spring, the RDG announced it was consulting on significant changes to ticketing arrangements, on a cost neutral basis. It has apparently received around 20,000 representations, but we have heard no more publicly about this since. This is a pity. It is a good initiative and it would have been a positive aspect to the response on the latest fare increases to have given an update and get the RDG on the front foot a bit more.

In the meantime, the industry should note the changes introduced by Virgin to fares charged on Fridays (PT196). Removing afternoon peak ticketing restrictions has not only eased overcrowding considerably, but attracted a whole lot more passengers and broken even financially.

A while back, I persuaded Southern to reduce some fares from Eastbourne and Seaford into Lewes by a third so as to attract drivers off the parallel A roads. They finally gave in, largely to shut me up I think, but then afterwards told me somewhat sheepishly that they have seen an upsurge in passenger numbers and that too had broken even.

The train companies could usefully look for more instances where this approach might work and get some brownie points from customers too. They need them.

About the author:

Norman Baker served as transport minister from May 2010 until October 2013. He was Lib Dem MP for Lewes between 1997 and 2015.

]]>Slide experiment ends – but the idea lives onhttp://www.passengertransport.co.uk/2018/12/slide-experiment-ends-but-the-idea-lives-on/
Fri, 07 Dec 2018 15:55:08 +0000http://www.passengertransport.co.uk/?p=12824It was the first service of its kind in the UK, but RATP Dev’s Slide shared ride-to-work service has now ceased operating in Bristol after two years

Slide Bristol was the first microtransit service to be launched in the United Kingdom

Launched in the city in July 2016 as a pilot project (PT140), Slide has since made more than 40,000 passenger trips in one of the UK’s most congested cities. However, the operation is closing due to “challenging conditions posed by Bristol’s infrastructure and competition from rapid transit routes”.

Slide is an app-based service that allows commuters to book a ride to work from a nearby location at a preferred time during peak commuting hours. The technology offers a convenient pick-up point and calculates the optimal route to the passenger’s place of work based on others requesting a similar journey.

Commenting on the closure of the Bristol operation, Coralie Triadou, RATP Dev’s London-based microtransit director, said: “Slide Bristol was the first microtransit service to be launched in the United Kingdom, and we are proud to have worked with the local community to provide this service to its commuters. Slide has proved to be extremely popular, covering more than 210,000 kilometres over a two-year period and receiving an average 4.9 out of 5 rating from customers for its drivers and service.

“Our experience in Bristol has shown us that microtransit services in large city centres can only operate smoothly when they are fully integrated with the public transport network, and this is where we want to focus our efforts. As these conditions became challenging to meet in Bristol and with increased competition from two new Metrobus rapid transit routes, we decided to end the service.”

We are proud to have transformed what was initially planned as a short pilot project into a full two-year operation and remain committed to investing in microtransit services and in developing new creative transport solutions which benefit commuters throughout the UK and beyond.

Triadou added: “We are proud to have transformed what was initially planned as a short pilot project into a full two-year operation and remain committed to investing in microtransit services and in developing new creative transport solutions which benefit commuters throughout the UK and beyond.”

Triadou told Passenger Transport that RATP Dev had been “quite happy with the overall patronage”, but it was not regarded as sufficient to be sustainable in the longer term. With only 13 people carriers serving one corridor in the city, Slide had limited reach.

“If it had been integrated with the bus system or the train system in the Bristol area, more people could have used us,” said Triadou. “And that’s where we think it makes more sense.”

To achieve this, RATP Dev would have to join forces with a commercial operating partner or an empowered transport authority, or integrate Slide with one of its own commercial public transport operations. In the UK, the French group owns a large London bus operation, Bournemouth’s Yellow Buses, Bath Bus Company and Epsom-based Quality Line.

We don’t think that these services, as I have said in the past, are going to replace mass transit,” said Triadou. “It doesn’t work. If you have any rail with a five-minute or 10-minute headway, it is not with minibuses that you can replace it. That doesn’t work.

“So of course it is going to be around mass transit and then it is like any other bus route. Bus routes work better if they are integrated. If you just operate 10 vehicles in the city with nothing around it is always going to be trickier.”

Slide’s flexible routeing was supposed to enable the service to bypass Bristol’s traffic jams, and the service benefited from being able to use bus lanes. But Triadou said that the bus lanes are “patchy”.

“That doesn’t work because if you want to take people out of cars you need to give a clear advantage to public transport,” she said. “Some parts of Bristol are really tricky.”

The roll out of Bristol’s new £230m Metrobus rapid transit network also posed a challenge for Slide. Its high frequency services and faster journey times were thought to have persuaded some Slide users to switch to the bus.

Since the launch of Slide, similar on-demand minibus services have emerged, like ArrivaClick in Sittingbourne and Liverpool, Go-Ahead’s PickMeUp in Oxford and ViaVan in London. Triadou believes that Slide will return. “We really believe that there is a place for these services. In 2016 we wanted to go to market fast … Now that we have got that learning,we are looking at …. expanding into places where it is more integrated with other services, so that it is not just a standalone service with a few vehicles, it is a proper complement to public transport.”

]]>Pension deficit clouds FirstGroup break-uphttp://www.passengertransport.co.uk/2018/11/pension-deficit-clouds-firstgroup-break-up/
Fri, 23 Nov 2018 17:45:14 +0000http://www.passengertransport.co.uk/?p=12810On his first day as the group’s new chief executive, Matthew Gregory says that £430m pension deficit would have to be accounted for in any disposals

FirstGroup’s new chief executive, Matthew Gregory, has indicated that breaking up the company remains a possibility.

Presenting the group’s half year financial results on his first day in his new role, after being promoted from chief operating officer, Gregory said First was “continuing to review all of our options”. With the share price significantly below an offer from private equity firm Apollo which First rejected in April, the company continues to face pressure from investors to explore business sales. However, Gregory highlighted that First’s pension deficit in particular created issues when considering if businesses or divisions could be sold for a price that would provide value to shareholders.

“What we want people to understand is that if we decided and felt it was right to do other structural things with the group, then we would have to take that into account,” Gregory said. Based on the most recent valuations, First has a pension fund deficit of around £430m, with a deficit of £286m in the bus and group schemes in the UK.

A leading City analyst told Passenger Transport that selling an underperforming division such as UK bus could be desirable to allow First to focus attention on turning round the remainder of the group. However, the need for any new owner of the UK bus division to fund pensions from standalone rather than group profits would be a barrier.

It doesn’t make it impossible but it does make it complicated

“It doesn’t make it impossible but it does make it complicated,” he commented.

The half-year results for the six months to September 30, 2018, again showed that advances in some of First’s businesses were offset by significant deterioration in others.

The largest business, First’s US school bus division, grew in the first six months of the year
for the first time in a decade, with operating profit rising 114% to $36.6m on revenue up 5.5% to $1.04bn.

However, performance continued to deteriorate at the problematic US Greyhound coaching business with operating profit falling 56% to $12.9m.

In the UK, performance was also mixed with the bus division continuing a nascent recovery
but the rail division hit by losses at South Western Railway,.

Overall, First reported a 3.4% rise in ‘adjusted’ group operating profit to £92.4m on revenue up 19.2% to £3.3bn, with profit before tax of £42m.

Chairman Wolfhart Hauser said that, after considering external candidates, Gregory’s appointment as chief executive reflected “the leadership skills and strategic decisiveness” he had shown since his promotion from chief financial officer to chief operating officer in May following Tim O’Toole’s sudden departure. His remit will include improving value for shareholders rapidly.

First’s longstanding director of finance Nick Chevis has been appointed interim chief financial officer until a permanent appointment is made. In addition, First has recruited British Airways chief financial officer Steve Gunning as a non executive director.